Can I use a long-term capital loss carryover to offset a short-term capital gain?
In short, yes, you can offset a short-term term capital gain with a long-term capital loss carryover. However, you do need to offset the long-term loss carryover against any long-term gains before you can offset any short-term capital gains. The process of offsetting gains and losses can be confusing. Here is a step-by-step guide on grouping and offsetting different types of capital gains and losses. Step 1: Determine which gains and losses are considered short-term vs. long-term. Short-terms gains and losses are those where your holding period (i.e., the amount of time you held the asset before selling or exchanging it) is equal to 1 year or less. Long-term gains and losses are those where your holding period is more than 1 year. Step 2: Offset your short-term gains against your short-term losses. Be sure to include any short-term losses carried over from prior tax years. This will result in your net short-term gain or loss. Step 3: Long-term capital gains tax rates vary based on the
